Turkey is
entangled in several shady endeavors that could eventually
jeopardizeits standing as a key U.S.
and NATO ally.

"This is not just a Turkish underworld problem. This is a global
illicit finance problem that intersects with rogue regimes and
terrorist non-state actors," Dr. Jonathan Schanzer, a
former terrorism finance analyst at the U.S. Department of the
Treasury, told Business Insider.

Based on his
experience tracking issues manifesting in Turkey in recent years,
Schanzer detailed the six "massive red flags" of the larger
scandal:

1)Last year Turkey was almost blacklisted
by the Financial Action Task Force (FATF), an
international terror finance regulatory body, for being out of
compliance with its status obligations.

"It was
remarkable not because they were out of compliance, but because
they were out of compliance for seven years," Schanzer,
whois now
the vice president of research at the Foundation for Defense of
Democracies, told BI. "They didn't do anything and they waited
until the 11th hour to make changes."

2) "Turkey appears to be a top
sponsor of Hamas right now," Schanzer said, referring to the
U.S.-designated terrorist group that governs the Gaza Strip. He
cited material support flowing from Turkey to Hamas for the
construction of schools and mosques as well as unconfirmed
reports of
$300 million in annual aid.

"If you take
that and you add that to what we can now confirm of Hamas
operatives working on Turkish soil, then there is an even greater
cause for concern," Schanzer said. Multiple sources told Schanzer
that Salah Al Arouri, the No.5 or 6 in the Hamas organization, is
known to be
based in Turkey.

Arouri
founded the West Bank branch of the Qassam Brigades, which is the
armed wing of Hamas. The group
stood out in eight day war against Israel in November 2012
and
continues sporadic rocket attacks against Israel.

"If one starts to connect the dots, you can't help but wonder if
Arouri is directing these attacks from Ankara or wherever,"
Schanzer said, noting that other Hamas operatives may be active
in Turkey. "If you think of
their efforts to join the EU [and] their alliance with the U.S.,
it's just remarkable that they would take those sorts of risks"
given U.S. laws against sponsoring terrorism.

3) Syria:
"We continue to hear about the flow of weapons and goods and
people over the border and
the border is rather porous," Schanzersaid. He noted that while "the Turks need
to do this to maintain good relations to whomever is on the other
side of the border," there are indications of assistance beyond
lax border security.

In December
the U.S. Treasury
designated Abd al-Rahman al-Nuaymi, the Qatari head of a
prominent Geneva-based human rights group, as a major al-Qaeda
terrorist financier and facilitator in Syria (and
elsewhere).

Nuaymi, who
was contacted in Istanbul by the Financial Times, denied
the charges.

"One just
needs to put all of the things together to start to see a much
more troubling trend," Schanzer told BI.

4)
Erdogan's relationship with Yasin al-Qadi, a Saudi billionaire
who was listed as a "Specially Designated Global Terrorist" by
the U.S. Treasury in October 2001 for allegedly funding Osama bin
Laden, Hamas, and other terrorist groups.

"The
interesting thing about the al-Qadi issue is that when he was
first designated, his front companies were all based in Turkey
... and he had quite a bit of operations on Turkish soil,"
Schanzer told BI.

Erdogan has
defended al Qadi for more than a decade. The prime
minister's security detail has also escorted
al Qadi into Turkey without a passport or visa. A list of
people due to be arrested in the corruption probe included al
Qadi, who is
reportedly
linked to the prime minister's son Bilal, but the orders were
not carried out.

"We don't know
exactly what the relationship is with al-Qadi, but we know that
his problems started in Turkey," Schanzer said. "It's very hard
to look at this right now without remembering that and asking the
question: Has he remained active in Turkey through this
time?"

5)An extensive gas-for-gold
scheme involving Iran, which ran from aboutMarch 2012 to the fall of
2013 and yielded Iran more than $13 billion dollars amid
crippling sanctions implemented by the U.S. over the country's
perceived nuclear program.

6)"To add insult to injury, we have
the Chinese missile deal ... where the Turks contracted with
a Chinese company that's already on [the U.S.] proliferation
list."

So while the domestic corruption issues and political battle
between Erdogan and powerful Islamic network
created by Fethullah Gulen will be decided through courts and
elections, the reasons listed above are international and central
to U.S. interests in the region.

Resolving these issues — particular those involving Erdogan's
government supporting two suspected al Qaeda financiers and a
U.S.-designated terrorist organization — may be critical to a
continued alliance between Turkey and the U.S.

"Yes it will
be a sensitive issue and yes it will raise issues with
Washington, but the alternative is unthinkable," according to
Schanzer.U.S. President Barack Obama and Turkish Prime Minister
Tayyip Erdogan (L) meet in New York September 20,
2011.REUTERS/Kevin
Lamarque

That alternative would involve
the status quo continuing to the point where members of Congress
or the State Department or the Treasury were forced consider
labeling Turkey a state sponsor of terrorism.

"No one wants
to do that, but the letter of the law is getter harder and harder
to ignore that they might qualify," Schanzer said. "If left
unchecked, this could be become a serious problem."

The obstacle
for the U.S. is that, given the Obama administration's
divergent Middle East policy, Washington hasn't put
itself in the best position to influence Erdogan's
government.

"One gets the sense that the wheels started to come off across
the board: Our Syria policy didn't hold up; our Iran policy
appears to be at odds with itself; and our general
counterterrorism policies across the region don't seem to be
applied consistently," Schanzer said. "Turkey seems to be in the
middle of all of that."